Welcome to this week’s publication of the Market’s Compass Crypto Sweet Sixteen Study #247. The Study tracks the technical condition of sixteen of the larger market cap cryptocurrencies. Every week the Studies will highlight the technical changes of the 16 cryptocurrencies that I track as well as highlights on noteworthy moves in individual Cryptocurrencies and Indexes. Past publications including the Weekly ETF Studies can be accessed by paid subscribers via The Market’s Compass Substack Blog.
An explanation of my objective Individual Technical Rankings and Sweet Sixteen Total Technical Ranking go to www.themarketscompass.com. Then go to the MC’s Technical Indicators and select “crypto sweet 16”. What follows is a Cliff Notes version* of the full explanation…
*The technical ranking system is a quantitative approach that utilizes multiple technical considerations that include but are not limited to trend, momentum, measurements of accumulation/distribution and relative strength. The TR of each individual Cryptocurrency can range from 0 to 50. The Sweet Sixteen Total Technical Ranking or “SSTTR” is the sum of the sixteen individual TRs and can be viewed as an overbought / oversold indicator as well as a confirmation / non-confirmation indicator.
The Sweet Sixteen Total Technical Ranking fell 22.78% to 178 last week from 230.5. Friday’s reading was the lowest SSTTR reading since March 27th when it logged a158 low.
Last week three of the Sweet Sixteen TRs gained ground and thirteen TRs fell. Nine of the Crypto Currency TRs ended the week in the “green zone” (TRs between 35 and 50), twelve ended the week in the “blue zone” (TRs between 15.5 and 34.5), and twelve finished in the “red zone” (TRs between 0 and 15). That was vs. the previous week when there was one in the “green zone” (Stellar / XLM), there was five in the “blue zone” and ten were in “red zone”. The average TR loss on the week was -3.28 vs. the previous week’s average TR gain of +1.19 vs. and an average TR gain of +2.03 three weeks ago, marking a technical deterioration and reversal.
*The 13-Week Simple Moving Average (SMA) lines smooths what can be “choppy” Objective Technical Rankings and better defines the trend in the TRs. Changes in the SMA trends with follow-through are signals worthy of technical note.
As it has had for the past three weeks, Tron’s (TRX) 13-Week TR SMA of its Technical Ranking has continued to roll over, it nevertheless remains at a level that continues to outpace the rest of the Sweet Sixteen TR SMAs. Last week Stellar’s (XLM) 13-Week TR SMAs continued to trend higher despite a contraction in its weekly TR, continuing to be followed closely by Cosmos’s (ATOM) 13-Week SMA and to a lesser degree by Binance’s (BNB) 13-Week TR SMA. Polkadot’s (DOT) sustained down trend in the 13-Week TR SMA leaves it at the bottom of the “pack” at 10.04 on a 13-Week TR SMA basis.
The Relative Rotation Graph, commonly referred to as RRGs, was developed in 2004-2005 by Julius de Kempenaer. These charts are a unique visualization tool for relative strength analysis. Chartists can use RRGs to analyze the relative strength trends of several securities against a common benchmark, (in this case the CCi30 Index*) and against each other over any given period (in the case below, daily) over the past two weeks. The power of RRG is its ability to plot relative performance on one graph and show true rotation. All RRGs charts use four quadrants to define the four phases of a relative trend. The Optuma RRG charts rotates from Leading (in green) to Weakening (in yellow) to Lagging (in pink) to Improving (in blue) and back to Leading (in green). True rotations can be seen as securities move from one quadrant to the other over time. This is only a brief explanation of how to interpret RRG charts. To learn more, see the postscripts and links at the end of this Blog.
*The CCi30 Index is a registered trademark and was created and is maintained by an independent team of mathematicians, quants and fund managers lead by Igor Rivin. It is a rules-based index designed to objectively measure the overall growth, daily and long-term movement of the blockchain sector. It does so by indexing the 30 largest cryptocurrencies by market capitalization, excluding stable coins (more details can be found at CCi30.com).
The chart below has two weeks, or 14 days, of relative data points vs. the benchmark, deliniated by the dots or nodes. Not all of the Sweet Sixteen are plotted in this RRG Chart. I have done this for clarity purposes. Those which I believe are of higher technical interest remain.
Stellar (XLM) gained a marked amount of negative Relative Strength Momentum two weeks ago (note the distance between the daily nodes) as it dropped into the Weakening Quadrant from the Leading Quadrant, it stabilized and hooked higher last week but its superior Relative Strength Ratio has contracted considerably, now 107.53, from 133.7 three weeks ago (see the Tabulation Table below). Cosmos (ATOM) rose into the Leading Quadrant two weeks ago but did a U-turn last week and fell quickly back into the Weakening Quadrant. Polygon (POL) has made a three Quadrant turn around. After falling from the Weakening Quadrant into the Lagging Quadrant, it hooked higher and rose into the Improving Quadrant and is only one good Relative Strength Momentum day from entering the Leading Quadrant. Uniswap (UNI) powered higher in the Improving Quadrant two weeks ago, and has entered the Leading Quadrant and as of Friday it held the Relative Strength Ratio “pole position” at 109.15.
The “Tabulation Table” below marks the Relative Strength and Relative Strength Momentum readings of the Sweet Sixteen vs. the CCi30 Index at the end of last week and the end of the two preceding weeks. If there has been an improvement in either the Relative Strength Ratio or the Relative Strength Momentum reading since the end of the preceding week, I have highlighted it in green. If there has been a contraction in either it is highlighted in red and an unchanged reading in either will remain black. The color-coding system has served as a heat map over the past three weeks highlighting either the continued improvement, deterioration, or stasis vs. the benchmark CCi30 Index. The crypto currencies that are in the comments below the RRG chart are highlighted in blue.
*Friday June 19th to Friday June 26th
Over the past seven days, only two of the Sweet Sixteen gained absolute ground with fourteen of the cryptos trading lower vs. the previous week when ten cryptos I track in these pages traded higher and six traded lower. Last week the average absolute percentage loss was -6.13% vs the previous week when the average absolute gain was+2.11%. Both weekly average gains exclude the two Indexes.
The Average YTD Absolute % Price Change of The Sweet Sixteen at the end of last week was -34.42% with only Tron (TRX) up on the year vs. the week before when the Average YTD % Price Change was -30.52%.
The Technical Condition Factors or TCFs are utilized in the calculation of the Individual Crypto Currencies Technical Rankings. What is shown in the excel panel below is the total TCFs of all sixteen TRs. A few TCFs carry more weight than the others, such as the Weekly Trend Factor and the Weekly Momentum Factor in compiling each individual TR of each of the 16 Cryptocurrencies. Because of that, the excel sheet below calculates each factor’s weekly reading as a percentage of the possible total.
A full explanation of my Technical Condition Factors go to www.themarketscompass.com. Then go to the MC’s Technical Indicators and select Crypto Sweet 16.
The Daily Momentum Technical Condition Factor or “DMTCF” fell last week to 25.89% or 29 out of a possible 112 from 57.14% or 64 the previous week but remains above deeply oversold reading of 4.46% or 5 out of a possible 112 four weeks ago.
As a confirmation tool, if all eight TCFs improve on a week over week basis, more of the 16 Cryptocurrencies are improving internally on a technical basis, confirming a broader market move higher (think of an advance/decline calculation). Conversely, if more of the TCFs fall on a week over week basis, more of the “Cryptos” are deteriorating on a technical basis confirming the broader market move lower. At the end of last week only one of the TCFs registered an increase and seven logged decreases confirming the broader weakness in the Crypto Currency market.
The “TSSTCF” Oscillator tallies the eight objective Technical Condition Factors into one overbought / oversold indicator that ranges between 0 and 8.
The CCi30 Index closed the week below key first support at the 9,295.00 level but managed to hold support at the Median Line (light green dotted line) of the new short-term Schiff Pitchfork (light green P1 through P3) but both shorter-term and longer-term momentum oscillators suggest that minor technical victory may be temporary. The 8-Week Stochastic Momentum Index continued to track lower under its signal line and MACD remains in negative territory and is teetering on its signal line. Although the Total Technical Condition Factor Oscillator (gold line in the lower panel) did not print a lower low last week, the still falling shorter-term 5-Week Exponential Moving Average fell back below the 21-Week Simple Moving Average (blue line).
With apologies to my readers, last week I did a poor editing job and did not notice that I failed to enter the chart that accompanied the technical comments on the Daily Chart.
In my technical comments on the Daily price action of the CCi30 Index three weeks ago, I suggested that the price action looked to me to be an Elliott Wave 4th wave in a three-wave a-b-c rebound prior to a 5th Wave final downdraft. A week ago, last Monday, the Index was capped at the Upper Parallel (solid violet line) of the Schiff Modified Pitchfork (violet P1-P3) and a week ago, last Friday, prices closed below the Lower Parallel (solid violet line). Last week prices moved impulsively lower (in a minute 3rd wave?). The 8-Day Stochastic Momentum Index continues to track lower and MACD has rolled over though its signal line. The Sweet Sixteen Daily Momentum / Breadth Oscillator has rolled over through both Moving Averages. Watch the newly added Standard Pitchfork (gold P1-P3) for a clue that the trend lower leads to the final short-term minor counter trend rally (minute 4th-wave), before the final down draft and terminus of the three-month correction.
For readers who are unfamiliar with the technical terms or tools referred to in the comments on the technical condition of the CCi30 Index can avail themselves of a brief tutorial titled, Tools of Technical Analysis and the three part Andrews Pitchfork Series available on my website.
Charts are courtesy of Optuma whose charting software allows the Technical Rankings to be calculated and back tested.
